Here's how some of the wealthiest people are investing their cash

TIGER 21, a group of high-net worth individuals, have ramped up their investments in hedge funds, stocks and private equity.

They’re reducing exposure to real estate.

Members of the group include executives and entrepreneurs with at least $10 million in investable assets.

Richard Baker | Getty Images

Ultra-wealthy investors may be feeling bearish about the markets, but they are still searching for returns.

Members of TIGER 21, a group of about 630 individuals with at least $10 million to invest, allocated more of their wealth toward stocks and riskier assets during the second quarter of 2018, according to the group's quarterly report.

"The majority of members are bearish, while a third are neutral and 15 percent are bullish," said Michael Sonnenfeldt, president and founder of TIGER 21.

"'Bearish' means people are concerned, but they're still fully invested because they think the opportunities they have identified, especially in private markets and income producing markets will more likely weather tough times," he said.

Indeed, public equity, private equity and real estate make up nearly 75 percent of their holdings. Only 10 percent of their money is held in cash.

Calculated risk-taking

TIGER 21 members ramped up their exposure to more alternative investments.

They ticked up their investments in private equity. That asset class accounted for 23 percent of their investments in the second quarter, up from 21 percent in the first three months of the year.

The investors also allocated 6 percent of their portfolios to hedge funds, up one percentage point from the first quarter.

That sector seems to be doing well: Hedge Fund Research reported that the HFRI Fund Weighted Composite Index was up 0.7 percent for August and up 2 percent for the year.

These investors also bumped up allocation to stocks, raising their exposure to 24 percent and riding the market's volatility during the spring.

Their concentration in stocks is up from 23 percent in the first quarter.

Interest rate risk

TIGER 21 has also pulled back on certain asset classes during the second quarter.

Fixed income accounts for about 9 percent of their holdings, which Sonnenfeldt said is an indicator of rising interest rates.

Meanwhile, the investors have also curtailed their exposure to real estate. TIGER 21 attributed this move as the likely result of "retailpocalypse" — the rise in mall vacancies and closures of brick-and-mortar shops — as well as the prospect of rising interest rates and falling real estate prices.

Real estate now accounts for 27 percent of their exposure, down from 30 percent in the first quarter.

Future growth

About 1 percent of the group's assets are held in miscellaneous investments.

Cryptocurrency is among those assets, as some of the group's members are experts in that area, said Sonnenfeldt.

Members have also demonstrated interest in cybersecurity and cannabis — be it providing financing to growers or investing in warehouses, he said.

"These companies don't have to create the demand for cannabis: It already exists," said Sonnenfeldt. "It just has to shift from what's illegal to what's increasingly legal."